PENGASSAN urges reversal as fresh controversy trails Tinubu’s oil revenue order

The row has emerged over President Bola Tinubu’s executive order on oil revenue remittances as the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called for its immediate reversal, describing the directive as inconsistent with the Petroleum Industry Act (PIA).

The directive, signed on February 18, mandates the direct payment of royalty oil, tax oil, profit oil and profit gas into the Federation Account Allocation Committee (FAAC), effectively stopping the Nigerian National Petroleum Company (NNPC) Limited from making deductions at source.

Business Hallmark had earlier reported that the order seeks to channel all revenues due to the federation under production sharing, profit sharing and risk service contracts straight into the federation account.

Some stakeholders, including Capital Market Operators, have backed the order.

But reacting to the development on Thursday, PENGASSAN President, Festus Osifo, criticised the move, warning that it could undermine the legal architecture carefully laid out under the PIA.

Speaking to journalists, Osifo argued that Sections 8, 9 and 64 of the PIA clearly spell out the powers, responsibilities and operational framework of NNPC Limited, insisting that such statutory provisions cannot be amended or overridden by an executive order.

“An executive order cannot supersede an Act of the National Assembly. The PIA is very explicit on the structure and governance of NNPC Limited. Any alteration must follow due legislative process,” he said.

Osifo maintained that while the president possesses constitutional powers to issue executive directives, such powers must operate within the bounds of existing laws. He cautioned that any perceived breach of the PIA could trigger uncertainty within the oil and gas sector.

According to him, policy unpredictability remains one of the major concerns of investors, and any action that appears to weaken the sanctity of the law may discourage both local and foreign investments.

“Nigeria has worked hard to reposition its oil and gas sector through the PIA. We must avoid actions that could send conflicting signals to the global investment community,” he stated.

The union leader further expressed concern about the potential operational implications for NNPC Limited, particularly regarding its financial planning and contractual obligations.

He warned that abrupt changes to revenue remittance structures could affect cash flow management, joint venture commitments and other statutory responsibilities of the national oil company.

Osifo also hinted that the president may not have been fully apprised of the broader implications of the order. He referenced Tinubu’s professional background in the oil sector, including his previous association with ExxonMobil, suggesting that a more detailed briefing might have yielded a different approach.

PENGASSAN, he said, remains committed to engaging the Federal Government through dialogue but will not hesitate to defend the integrity of the PIA and the interests of its members.

The controversy adds another layer to ongoing debates about fiscal transparency, revenue management and corporate governance in Nigeria’s oil industry.